U.S. Single-Tenant Net-Lease Retail National Report

Sector retains title of least vacant commercial real estate segment. As of March, the number of major U.S. markets with sub-4 percent single-tenant vacancy matched the count from the same period five years ago, with national vacancy down 10 basis points during that stretch. So far this year, the labor market has exceeded expectations and supported real term increases in retail spending, with a new benchmark for quarterly core retail sales set during the first three months of 2024. While inflation and budget tightening are influencing more households to prioritize necessities, consumers are also reserving more of their incomes for eating out and experiences, a dynamic that is aiding foot traffic and patronage at net-leased retail spaces. Should these trends continue amid a pullback in construction and historically low vacancy, it will reinforce positive leasing activity and prompt retailers to execute expansion initiatives.